Things have recently changed in my families life and I have 5 years to save for a college education for my youngest son. I may or may not be able to save all of it in that time period, but I should be able to get ahead of the game. Something I wasn't for my oldest son. I was looking at 529's, but didn't really like the state backed one due to the way it paid out, as in, what I could spend the funds on and the issues with getting a refund if he didn't go to school or he got a scholarship instead, which I believe is most possible. Of course, there is the non-state guaranteedplan that I could use also, but I admit that need to read up on it some more before I decide. At any rate, I have also looked at savings accounts and stocks too, but both of those are non-tax free or deferred and the savings account is a safe way to lose money. Does anyone here have input on this? Thanks.

A 529 is a good thing but like you said there are restrictions when it comes to using the funds. The term "qualified educational expense" becomes key. The nice thing is that you can change beneficiaries or take a tax hit on what was earned. In 5 years that likely won't be too bad. If you feel like gifting you can set up a UTMA that will allow you to keep control but without the tax benefits of a 529. Many folks do both.

When it comes to what to invest in, I promise you will get 50 different answers. Your time horizon is short which dictates being conservative. Individual stocks might be too aggressive. I use mutual funds, with your timeline, a conservatively balanced C share account might fit the bill.

Congrats and good luck on that scholarship, that's the recommended college savings plan! Haha.

Edit: I don't want to be misconstrued as giving advice. I'm just talking about what I set up for my little brother.

Thanks Stephan. My oldest son picked up a good scholarship that really helped expenses. I was lucky that my in-laws planned ahead and made some good decisions early in life to allow them to help all the grandkids get through school. Since I have the opportunity to save now, that is what I plan to do so that they will not feel like they have to help later. Maybe they will still help, I just do not want to feel the crunch again when my youngest is needing some "extras" while he is in school.

I was talking to a guy at work today, who plays the stock market and was new to it only a couple of years ago, and he was talking about ETF (I think) stocks or mutual funds. Again, thanks Stephan. I'll look at what you suggest and proceed at my own "risk".